It's way too fast. There has to be another leg down - sooner or later. Cisco's Bullish Earnings Trigger Stock Market Rally BY JONAH KERI INVESTOR'S BUSINESS DAILY Posted 8/8/2007 A bullish earnings report from Cisco Systems (CSCO) sent stocks skyward Wednesday, with the Nasdaq leading the way. The Nasdaq gapped up at the open and kept rising for much of the day. With about 90 minutes left, stocks pulled back on rumors of a Goldman Sachs profit warning. But stocks rallied in the final minutes after the investment banker dismissed the speculation. The tech-laden index rose 2%. The NYSE composite jumped 1.5%, the S&P 500 1.4% and the Dow industrials 1.1%. The small-cap S&P 600 bounced 1.5%. Volume swelled across the board. The Nasdaq's total of 3.68 billion shares marked its second-biggest reading of the year, trailing only the most recent quadruple-witching day June 22. Cisco added about 110 million shares to the Nasdaq's tally by itself. The networking giant vaulted 1.97, or 7%, to 31.66 on nearly four times average trade. Cisco's breakaway gap left the stock at its highest point in 6 1/2 years. The market's big gains were an encouraging sign in its fledgling rally. Stocks struggled in late July and earlier this month, before the Dow staged a follow-through on Monday. Two straight up days in brisk volume have ensued, pointing to active buying among big-money institutional investors such as mutual funds. Highly rated stocks have fared well. A number of former market leaders have staged robust gains in rapid turnover, returning to prominence. That kind of broadening leadership is typically a good sign for an emerging rally. Life Time Fitness, (LTM) Dynamic Materials, (BOOM) Hansen Natural (HANS) and Central European Distribution (CEDC) were all big gainers in recent years that fell into corrections. They all notched 52-week highs on Wednesday. The IBD 100, which serves as a proxy for the action of top-rated stocks, rose 1.4%. That marked the third time in the past four sessions that the index had lagged or only matched the S&P 500. While plenty of leaders surged in volume, several high-rated stocks sold off hard. Losers included Coach, WellCare Health Plans and Stericycle. The big jump in the broad market sent Treasury prices lower. The yield on the benchmark 10-year note climbed to 4.87% from 4.77% on Tuesday. With Monday's follow-through holding up well so far, investors should continue to troll for buy candidates. But a market rally shouldn't make you lower your investing standards. Buy only high-quality stocks at optimal buy points such as a breakout from a sound base or a bounce off the 50-day moving average. That way you'll be well positioned regardless of which way the rally goes from here.